I disagree. I believe the majority of people who use payday loans do it time after time after time. They are not always in urgent financial need, but they tell themselves they are. Urgent need is like when the car breaks down and you can't get to work, not when you spent too much on cable movies or your cell phone and now you don't have money to go eat out. It is a lifestyle some people allow themselves to get into. Unfortunately it is a little like gambling; the house always wins.

I used to have a guy working for me who was like that. He was always in hawk to the loan sharks. His theory was as long as he could afford the payments, he was alright. He was garnished on a regular basis, and he was always looking for an early paycheck, even though he earned pretty good money.

People who are aware of the cost of doing business with these creeps take one look at the agreement and realize that ANYTHING would be better than borrowing here. Car title loans are even worse I think. You get sucked into the vortex of debt and are lost forever until you claim bankruptcy or get bailed out by someone.

The best answer I have heard so far was actually done as a parody on "Saturday Night Live" with Steve Martin. You may find it on U-Tube.

The answer was, if you don't have the cash, don't buy it.

I absolutely agree with this. And if it's something really important that you don't have cash for, like say food... well then ya may need a different job.

From what I've seen, for people who need a few hundred dollars now, but don't get paid for another week or so, their options are:

-Borrowing from friends/family
-Taking out an advance on a credit card (not sure what kinds of fees this entails)
-Writing the check (knowing it will bounce, but your banks overdraft protection will kick in. The average overdraft protection charge is something like $27)
- Pawn shop or title lender (if you have something to put up for collaterol)
- Payday loan (cost in most states is $15-$17 per $100 borrowed)

I don't know of a bank that will loan you just a few hundred dollars.

They need to learn to budget.

Payday loans are popular for several reasons: they're quick, they're convenient, and there's no credit check. If you pay them off in the 2 week period, the $15 to borrow $100 isn't so high, it's just 15%. That's less than some credit cards that are at 21% or more. And it's certainly less than paying a bounced check fee or utility disconnect charge. If you're smart and responsible, a payday loan can be a big help in an emergency. And for those who say "get a better job" or "learn to budget," that sounds good. But try telling that to a single parent who already works two jobs and has an unexpected car repair or a sick child (with no health insurance.) There are millions of Americans who fit that profile, so please don't be so cavalier in your criticism. You, too, may some day find yourself in a financial tight spot.

15% over two weeks is 30%/month x 12 = 360% interest which is definitely higher than a 21% annual credit card. (Sorry, I don't have my calculator handy to figure the yield.)

Yes there are DIRE emergencies. A doctor or hospital bill is not one of them. They will take payments for much less interest and probably give you a discount if you show them you need their help. Call the utilities. If you give them a schedule when you can pay, they will give you those days and follow up on the new due date. You need to follow through though or they will cut you off and then it will probably cost you additional money to get reconnected.

Most of us have had times we felt the pressure of too little money and too many needs. The reality is that many of our needs are really just wants. We allow ourselves to be undisciplined in our spending, then blame anyone but ourselves. Before you borrow @ 10% or 15% or 21% or 360%, ask yourself what would you do if borrowing were not an option. My guess is you would do without that purchase.

I think in most cases it is already too late when the Payday loan is considered. You already spent the money when you shouldn't have, now it is a race to get money into the bank before you have a $35 (or more) service charge. Budgeting doesn't happen after the sale, it begins at the first of the month with a well thought out and organized plan. But it does take discipline to follow the plan when we are tempted with so many pretty things.

Thanks Jay for sticking up for people like me.

Seriously though people do need to learn to budget. There's truth to "getting a better job" too since some cannot see beyond what they have right now and while they complain and get stressed don't do something really proactive to better their financial situation.

My answer is simple. Don't buy (unless real need/emergency). Starting tightening the budget (walk if you have to...eat stuff you don't like much if you need to). Start finding ways to earn extra income.

If you need an emergency loan I think payday loans are good enough (better than issuing a check that's going to bounce) but you should never get into the habit of it.

My 2 cents... well I would try super extra hard never to use a payday loan because all of the above reasons are right on.

However, there are people who are in extremely tight situations... I have been there... but and this may sound crazy, but exhaust all other possible means before the payday or title loan.

Ask family for a loan. sell personal items... etc...

I could understand using a payday loan once or twice, but if you need them again and again then there is some fundamental root problem going on...

There is one very solid alternative. Work EVERY WEEK off of a budget and use that budget to fund and emergency fund. Get at least $1,000 into they emergency fund and then there will be no need for payday loans to cover true emergencies.

Poor credit credit cards... designed for bad credit, no credit and extremely poor credit will not only help rebuild your financial future, but will also limit your amounts owing. Great way to rebuild your credit

Most people who need a temporary financial boost could do without that need if they would have a budget in place from the beginning of the month.

Especially people that live paycheck-by-paycheck should have such a budget in order to eliminate the need for a pay-day loan.

Yes, there may be circumstances when such a loan is needed but it shouldn't be the norm.

An emergency budget may solve those problems but it will be hard for someone who already strech their finances to set-up one (it will be worth the effort but it needs to be included in the monthly budget)

I recommend that a separate account will be set-up for the emergency account and that an equal amount every month will be transferred into that account. An automatic transfer will make sure that the funds will be added into the 'emergency-fund' rather then spend on somehting else.

An adjustment to the current life-style may be needed in order to budget.

A better budget = a better lifestyle because less stress is worth a million dollars.

In reply to Dru's comment...

Yes this is a very high annual percentage rate, but it is irrelevant when you consider the fact that most payday loans have a life of six weeks (at most).

It all depends on the policies of the company. You are right to be wary as getting into debt is a big decision. It just means you need to carry out a bit of research first into the company policies.

Some have cut of periods for the interest, so if a client gets into trouble with their repayments then interest is cut off. This means it doesn't get out of control and end up being an amount that the client is never going to be able to pay back. After all, if the clients can't pay back what they've borrowed, the company will end up with absolutely no money.

Another factor to look into is how they work out how much you are eligible for. Some companies will work out how much you can borrow based on your total income AFTER your rent/mortgage payments. This means you are not left in the lurch when these bills come because you have to pay back your payday loan first.

People who use payday loans seem to be doing it over and over again because they do not budget properly. High interest, over and over again, still equals high interest. I had a guy working for me several years ago who fit this profile. He always had a payday loan, and he was always broke, in spite of the fact that he was paid quite well. His philosophy was he didn't care how much something cost, as long as he could afford the payments.